80 20 Rule in Online Marketing
Recently I’ve been thinking a lot about the 80/20 rule and how it applies to online marketing.
Vilfredo Pareto first discovered the 80/20 principle in 1895 when he discovered 80% of the land was owned by 20% of the population. Since then we’ve seen how this rule can be applied to virtually everything in our daily lives. To put it simply, 20% of the activity produces 80% of the results.
This is NOT a hard and fast number. For example, if you’ve ever had affiliates promote for you, you know that 99% of the results are produced by 1% of the affiliates. So the number does vary based on the situation, but the principle holds true.
The majority of your results come from a small percentage of your actions. Which 20% of your marketing is producing 80% of the results?
This principle is the basis of the recent Adwords Bullseye product Glenn Livingston and I did together. Instead of focusing on ALL the keyword phrases and actions every is telling us to use today, we zero in on a bullseye…and grow everything out from there. This saves a MAJORITY of your time…all that time you would have been wasting on ineffective techniques.
It’s also the basis of some of my other recent articles such as One Way to Success Online. When looking at how all my most successful clients operate, I noticed each of them focuses on ONE primary content method, traffic generation method, and conversion method. They focus on the right method for them….their 20%.
When I discuss outsourcing, I’m always thinking about the 80% you’re better off outsourcing to others…those routine activities that drain your time that others could do for you. And hopefully you eventually move that 80% to 90% or more you can outsource.
How does the 80/20 rule apply to YOUR online marketing?
1. Focus on the best visitors.
I don’t know very many sites that have a 20% sales conversion rate…opt-ins yes, but sales, no. So the numbers are even worse here. Let’s say you knock a home run sales piece and convert 10% of your visitors into sales. That means 90% of your visitors don’t buy.
Why would you worry about the 90% who aren’t buying. Your goal isn’t to write your sales piece to them. It’s to write to the 10% you can convert into buyers.
This means you’re not writing to the 90%. You’re writing to the 10%. Once you start thinking about it this way, it eliminates some of the complaints about longer copy, “Well most people won’t read all that.” Nope they won’t. Ninety percent won’t buy anyway. We’re writing only to the ones who buy.
Even if your sales presentation OFFENDS some people…that’s OK if it resonates with the potential buyers. Quit trying to please everyone who visits your site. You can’t. All you can do is build your following…your tight knit group of members and buyers.
What features, benefits, and emotional end results are your customers looking for?
2. Focus on your best subscribers.
Recently a coaching client told me they received some complaints to a few of the emails they were sending out.
The first thing I told them to do in response to this is check those people against their customer database. Are the people complaining customers or are they just list subscribers who haven’t invested in their business yet?
I don’t think I’ve ever sent an extremely effective email that didn’t get a few complaints. If people emotionally identify with your email, they respond either favorably or unfavorably. If NO ONE is emotionally affected by your email, it probably didn’t do very well.
They may love you. They may hate you. The worst thing you can do is simply have them ignore you.
You want to watch the reactions of your core group here. These are those who cheer for you, buy your products, and recommend you to others.
You may be reading this and thinking, “Well what about those who haven’t bought yet, but they might in the future?”
It’s tough to judge those, but we do KNOW that the majority of your list members will not be buying…so the odds are against it. Our best evidence to look at is the response of those who are buying right now. They are our core group.
How do buying subscribers feel about what you’re sending them by email?
3. Focus on your best customers.
Eighty percent of profits are produced by twenty percent of your customers. Glenn Livingston even takes this further because he did out the numbers to find you could square the Pareto principle in this area. Fifty percent of your profits are produced by 5% of the buyers. Glenn calls these the hyper responsive customers.
Are you focusing your product development efforts and your offers to this 5% who drive the rest of your business?
These are the ones who buy everything you sell, join your high ticket clubs, and share your information with their friends. They’re the influencers in the marketplace who open the doors to dozens or even thousands of new customers for your business.
This is one of the biggest problems with surveys. It’s tough to pull out who are the most responsive people from those who won’t buy anyway. This is also why I pay so much attention to what my coaching clients ask questions about and have problems with. They’re my “hyper responsive” customers – they’re the ones that allow me to look into the mindset of my customers.
Always think about how you can create a focus group not of the general population…but of your very best most responsive customers currently.
What else do your hyperresponsive customers want to buy?
Quick update for “Adwords Bullseye” buyers and any of those who are interested in Glenn’s products. Glenn is raising the price on his Hyper Responsive Club tomorrow (September 15, 2009). This is your last chance to lock in the current monthly rate.
If you’re an Adwords Bullseye buyer, DO NOT use the link here. You have a special link inside the product itself to save big on your first two month’s membership. You too though can lock in your long term rates if you decide to stay a member though.
If you’re not an Adwords Bullseye member, you can find out more about his Club here…
Related Entries:- Why Do People Fail At Adwords?
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- More Sales and More Fun
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9 Responses to “80 20 Rule in Online Marketing”
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I love your article on the 80-20 rule and because of it I understand it better. Once I am done with the coaching class I am enrolled in for one year, I think I will try out yours. I will be done with this affiliate course in March I think. These recommendations of yours on the implementation of the 80-20 rule are going to be a big help.
Evelyn Guzman
Hi Terry,
Spot on about focusing on our best visitors, subscribers, and customers. I used to have a problem of catering to ALL people out there, thinking that I have to please everyone.
I’ve now realized that this is definitely not the case, and we should concentrate our time and effort on those 20% that yield 80% of the results.
Cool post Terry. Keep it up!
Welly Mulia
Hi Terry,
I believe in your statement “you’re not writing to the 90%. You’re writing to the 10%. ” which is not understood by 90% of Online Business people . So only they fail.
Thanks for your writing which will change 90% of Online Business people who is also going to believe in the same if they read your article (if they are lucky).
Thanks,
Mani Nagappan
Great article as always. I hope to see you at a seminar in the future to thank you in person. Have a great week
Thanks for all your coaching on how to apply the 80/20 rule. While the rule is great, it’s the application that matters. And you’ve shown us how to do that with Adwords in last month’s newsletter and how to do it with SEO in this month’s newsletter.
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Hi,
thank you very much for this article, the 80/20 rule is something very special in business, its hard to explain correctly and give a good description about it, but I think you did that very clearly. Focus on 20 Percent and success is yours.
Thanks Terry for a great blog post on the 80 20 principle. I have only recently come to realize just how powerful this concept is – especially when applied to Internet Marketing. Thanks also for all the practical guidance on how to apply it in your Adwords Bullseye product.